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Friday, March 01, 2013

Mahindra gains 11 percent rise in sales

Maruti car sales dipped by 8 percent, Hyundai car sales up only by 5.4 percent, Tata sales are marginally up but there is a car maker that has gained around 11 percent increase in sales. This car maker is none other than Mahindra and Mahindra. With robust sales witnessed in utility cars segment which is its specialization, the car giant sold 47, 824 units in February this year compared to 43,087 units in the same month last year. Yet again the best selling SUVs by Mahindra remained Mahindra XUV 500, Mahindra Scorpio, Mahindra Quanto and the MUV Mahindra Xylo. Mahindra Bolero too good a steady response in the segment. However, the future of the SUVs is meek as the government has imposed higher taxes on these cars.

Mahindra car exports also witnessed a rise by 30 percent and in the month of February, the car maker sold 3425 units. But the real dampening activity will be initiated now on as the government hiked the excise duty to 30 percent that will result in the increase in big SUV car prices by upto Rs 60,000 and thus it will trigger lack of demand. Meanwhile, the Mahindra Quanto will be exempted from price rise as the hike is only applicable on SUV which are over 4 meters in length. Furthermore, the hike in excise duty will not affect SUV sold as taxis.

In all, the union Budget has clarified that it did not like Mahindra car sales to grow by leaps and bounds. Now, it is upto Mahindra to fully revise the price of its cars due to the budget declaration and witness drastic slowdown in demand or bear some amount of the pressure due to excise duty rise and share some of it with the car buyers and maintain steady sales. The ball is now in Mahindra’s court and the industry highly anticipates it to take the second step.